Behind the Scenes of the MoneySense Best Online Brokers in Canada Review

Questrade, one of Canada's leading independent online brokers, returned to the top honour in the 2021 edition of the MoneySense Best Online Brokers in Canada, beating out Quebec-based National Bank Direct Brokerage and de-throning last year's winner Qtrade Direct Investing (formerly known as Qtrade Investor) who came in 4th place. TD Direct Investing rounded up the top 3 again in 2021. The review, now in its 9th year, was written for the second year by Surviscor's President and CEO, Glenn LaCoste, and powered by Surviscor data and analysis which has been altered for MoneySense to provide valuable advice to the self-directed, do-it-yourself investor. #Questrade1

In the past year, Canadian investors have embraced online brokerage services at rates not seen since the early adoption of the internet in the late 2000s. Back then the Canadian disrupters were US-based online brokerage firms like Datek, Ameritrade and Scottrade who were approached by Canadian DIY investors as the Canadian discount brokerage firms were far behind its US counterparts in terms of online trading capabilities and were strained with 2-3 hour waits for customer service. Fast forward 20 years, and this time the surge was partially attributed to the COVID-19 pandemic lockdowns that forced many to navigate life from behind a computer screen which provided more time to keep a watchful eye on a volatile market resulting in unprecedented account openings levels not seen in many years. All of sudden, everyone was a DIY investor and even more a DIY investor or gambler, but the main reason was once again the US-based disruption caused by both marketed zero-fee transactions and the emergence of the social media promotion and influence on firms like GameStop and AMC Entertainment. #ThrowbackInvesting

The BEST and WORST Firms - By Category

2021 MoneySense Firm Rankings and Commentary

Lessons Learned

MoneySense and Surviscor Partnership

Read the Complete MoneySense Review

The BEST and WORST Firms - By Category

View the MoneySense Firm Comparison Grid

2021 MoneySense Firm Rankings and Commentary

#1-QUESTRADE (36 Points)

• Service responsiveness
• All digital investor experiences
• Process of opening an account
• Participated in review findings
• ECN fees
• Commissions on ETF sales
• Data fees

BETWEEN THE LINES

Questrade is one of the most well-rounded self-directed brokerage firms in Canada as it can cater to both new and seasoned investors as well as active traders. The one potential issue with Questrade is its fee structures and cost of data, both that can be both attractive and expensive depending on an individual's trading patterns.

Link to the complete Questrade Review

#2-NATIONAL BANK DIRECT BROKERAGE (31 Points)

• Competitive fees and commissions
• ETF investing
• Various levels of market data
• Participated in review findings
• Becoming a customer can be difficult at times

BETWEEN THE LINES

National Bank Direct Brokerage has made some positive headway in the last year with a simplified approach to its commission schedule and its ongoing industry-only, free, no product restrictions, ETF investing.

Link to the complete National Bank Direct Brokerage Review

#3-TD DIRECT INVESTING (25 Points)

• Financial literacy
• Market data
• Digital Investor experiences
• Participated in review findings
• High fees and commissions
• Becoming a customer can be difficult at times

BETWEEN THE LINES

TD Direct Investing is the largest self-directed brokerage firm in Canada but tends to closely mirror features and functionality of its U.S.-based operation. An investor should not be unhappy with the digital platforms but may be frustrated at the system outages and below-average service levels.

Link to the complete TD Direct Investing Review

#4-QTRADE DIRECT INVESTING (22 Points)

• Service responsiveness
• Online Investor experience
• Participated in review findings
• Fees and commissions are on the higher side
• Mobile Investor experience needs to improve

BETWEEN THE LINES

Qtrade Investor is now Qtrade Direct Investing, a bold new branding that appears to be pointing to new investors. Qtrade Direct Investing continues to be a leading firm for customer service responsiveness and online investor experiences.

Link to the complete Qtrade Direct Investing Review

#5-BMO INVESTORLINE (9 Points)

• Mobile experience
• Market data
• Declined participation in review findings
• Poor service responsiveness
• Expensive commissions

BETWEEN THE LINES

BMO InvestorLine has been in a steady lull for the past 5 years after spending 15 years as one of Canada's premier online brokerage firms. It is difficult to understand if the self-directed business remains a priority as the newest platform took many years to come to fruition. The confusion is the dual platforms for one investor experience, but it was a start in the right direction.

Link to the complete BMO InvestorLine Review

#6-SCOTIA iTRADE (6 Points)

• Availability of practice accounts
• Market data
• Participated in review findings
• High fees and commissions
• Mobile Investor experience
• General transactional experiences

BETWEEN THE LINES

How the mighty have fallen, a saying that represents the once industry-pioneer's fall from grace. While Scotia iTRADE's digital platforms remain a viable bank-owned investor alternative, the lack of corporate dedication and leadership has led to its below-average performance over the past 5-10 years as indicated by its industry ranking decline and failure to provide acceptable levels of service.

Link to the complete Scotia iTRADE Review

#7-RBC DIRECT INVESTING (5 Points)

• Availability of practice accounts
• Financial literacy
• Participated in review findings
• High fees and commissions
• Mobile Investor experience
• ETF investing

BETWEEN THE LINES

RBC Direct Investing is near the bottom of the bank-owned firms which is puzzling due to the success of its digital banking platforms. While RBC Direct Investing demonstrates the ability to be agile and launch new features, the overall digital functionality remains average at best and appears to be more marketing than providing improved investor experiences.

Link to the complete RBC Direct Investing Review

#8-DESJARDINS ONLINE BROKERAGE (4 Points)

• Competitive fees and commissions
• Participated in review findings
• Poor service responsiveness
• Becoming a customer can be difficult at times

BETWEEN THE LINES

Desjardins Online Brokerage is run off of various Disnat platforms, one of the first discount brokerage platforms established in Canada. The Disnat Classic platform, that caters to investors, requires some attention but time will tell if parent Desjardins backs any potential changes.

Link to the complete Desjardins Online Brokerage Review

#8-VIRTUAL BROKERS (4 Points)

• Process of opening an account
• Declined participation in review findings
• Fees and commissions
• Financial literacy
• Digital platforms experience

BETWEEN THE LINES

Virtual Brokers made a big splash in its early years but has fallen prey to the corporate takeover that makes strong independent firms less relevant through decreased focus and strategy.

Link to the complete Virtual Brokers Review

#8-WEALTHSIMPLE TRADE (4 Points)

• Select $0 commissions
• Fee for real-time quotes
• Limited amount of North American stocks and ETFs
• Poor foreign exchange rates
• Digital platforms provide weak investor experiences

BETWEEN THE LINES

Wealthsimple Trade is in Surviscor's BUYER BEWARE category. Wealthsimple Trade made a big splash a few years back with the most basic mobile platform in the industry, promoting its apparent $0 commission fees as the proverbial carrot. What DIY investors need to know is that the mobile and new online platforms are weak and do not support a traditional DIY learning experience or provide the necessary tools and supporting resources for self-directed investors to be successful.

Link to the complete Wealthsimple Trade Review

#8-CANACCORD GENUITY DIRECT (4 Points)

• Service responsiveness
• Declined participation in review findings
• Account minimums for Investor acccounts
• No Mobile platform
• Digital platforms experience

BETWEEN THE LINES

Canaccord Genuity Direct is another firm in Surviscor's BUYER BEWARE category. Investors contemplating using the platform should think twice as the results indicate a lack of commitment by parent firm Canaccord who appears to be trying to take advantage of a hot market. Every other firm in the study provides a considerably stronger investor experience alternative despite some strong first impressions from CG Direct.

Link to the complete Canaccord Genuity Direct Review

#12-CIBC INVESTOR'S EDGE (2 Points)

• Strength of CIBC's leading-edge digital banking platforms
• Participated in review findings
• Poor service responsiveness
• No significant changes to digital features and functionalities over the last decade

BETWEEN THE LINES

CIBC Investor's Edge was an early innovator in the early 2000's but that success has not carried forward into the past decade or now despite industry-leading digital banking platforms. There could be a light at the end of the tunnel as recent cosmetic changes may lead to a renewed commitment to the investor platforms once again providing an actual edge for investors.

Link to the complete CIBC Investor's Edge Review

#14-HSBC INVESTDIRECT (1 Point)

• Competitive fees and commissions
• Foreign trading capabilities
• Participated in review findings
• Poor service responsiveness
• No Mobile platform
• Overall digital experience is poor

BETWEEN THE LINES

HSBC InvestDirect can boast about being the only Canadian self-directed firm to offer pure foreign trading and foreign account balances but that is it for the differentiators. It is hard to understand if HSBC InvestDirect committed to Canadian investors with senior management turning a blind eye at poor service statistics and having consistent bottom-tier platform rankings.

Link to the complete HSBC InvestDirect Review

#15-LAURENTIAN BANK DISCOUNT BROKERAGE (0 Points)

• Actual service responsiveness indicates the lights are on
• Declined participation in review findings
• No redeeming qualities
• No Mobile platform
• Digital platforms experience

BETWEEN THE LINES

Laurentian Bank Discount Brokerage is the last firm in Surviscor's BUYER BEWARE category. Investors contemplating using the platform should think twice as parent company Laurentian Bank has not invested in the platforms for over 20 years. There has been some small hope of late as Laurentian Bank Discount Brokerage has started to respond to service requests, but it is unknown as to if this is a new committment or simply taking advantage of a hot industry.

Link to the complete Laurentian Bank Discount Brokerage Review

INTERACTIVE BROKERS (CANADA) - Not ranked

Interactive Brokers was left out of this review as it mainly caters to traders, or seasoned investors, and it is a very US-centric site which does not cater to Canadian content. The proof is its U.S. interest rates marketing and industry accolades that are for its U.S division compared to U.S. trading firms.

Link to the Surviscor Interactive Brokers Canada Review

Lessons Learned

Beware the Marketing when it comes to Fees

Much of the marketing you see for online brokerage firms tends to focus on fees - and with good reason. Unfortunately, those advertised fees do not always tell the whole story. For example, many low-cost firms charge an ECN (Electronic Communication Network) fee that can double your commission costs, while others exclude some popular stocks from their investment offerings. Or how about firms who offer free ETF trading through limited product or only for purchases? Then there are platform fees for enhanced quote data, which can run investors an extra $30 per month, but may be worth it. The overall message is buyer beware. Don't fall for the shiny marketing message. Do your homework and ask yourself:

Firms Never Get a Second Chance to Make a First Impression

Customer service is the key differentiator between firms and should never be taken lightly and looking at the way firms treat potential customers to evaluate how committed they are to service. The general pushback we get from lagging firms, most of which are banks, is that they treat existing customers better than potential customers. Assuming that's true, what does it say about these banks? Do not be fooled by big brand names and assume a firm is better because it's big, or because it's a bank.

Financial Literacy is Weak

Time and knowledge have been the traditional roadblocks to DIY investing as the ability to choose one's own investments requires at minimum, conducting research to make informed investment decisions. Knowledge is the issue when it comes to financial literacy as most firms do not provide adequate tools and educational guidance that allows DIY investors to succeed or make educated decisions through instructional and educational videos on platform usage or general investing subjects, seminars, webinars, and articles.

Mobile Experience is Still Not Where It Needs to Be

Different year, same message. The Canadian discount brokerage industry was late to the financial services mobile party, and it still lags both its Canadian banking counterparts and its US-based counterparts. With the current sophistication of mobile devices, investors should expect to have the same experience on their phones as they would on a desktop or laptop and access to basic quotes, basic account information and limited trades are over. Some progressive online brokers do have a near-full account experience via mobile, offering all the same tools and analysis investors would find on their computers. But, in general, most Canadian firms are far from that level.

$0 Commission Is Not Always Worth It

Have you ever stopped and asked yourself why a firm, which is clearly in the marketplace to make money, is willing to pay for all an investors costs? Novice investors tend to be attracted to the online brokerage industry due to the new $0 commission but generally the platform and the cost savings of dollars per trade is not worth the lack of guidance, education and market depth required by a novice or average DIY investor. It is simple, if there are no commission charges, then there are fees being made elsewhere. Maybe its over-inflated foreign exchange rates which seems to be the number one online forum compliant with Wealthsimple Trade. Or maybe it's the limited and delayed market data which could translate into poor executions that cost money. Then there is the recent example of order-flow partners where the firm gets paid for each order they send to a partner for processing, like the U.S.-based digital platform Robinhood, which was recently called out for its trade routing and discretionary stock availability.

A Proven Partnership for 9 Years and Counting

The History

The MoneySense and Surviscor partnership was established in 2013 between Jonathan Chevreau and Surviscor president and CEO, Glenn LaCoste to enhance the MoneySense editorial reach into the discount brokerage industry. The partnership has grown over the years with expanded categories as well as an expanded number of firm as MoneySense has been able to piggy-back off of the extensive expansion of Surviscor's proprietary analysis over the past decade.

The Common Goal

Jonathan and Glenn's initial goal remains the same today for the MoneySense Best Online Brokers in Canada yearly review, to provide Canadian DIY investors with another reputable non-editorial viewpoint and insight into Canada's ultra-competitive discount brokerage industry. Both new and seasoned veterans of self-directed investing are provided with the facts to help make informed choices between the merits of each discount brokerages and the message remains clear 9 years later. If you already use an online broker and have noticed a change in the relationship or longer wait times for service, challenge yourself to explore other firms' offerings.

The Methodology

The methodology continues to be altered and enhanced over the years and remains customized for MoneySense using Surviscor's proprietary scorCard data from four detailed yearly reviews; [Online Experience], [Mobile Experience], [Cost of Services Experience] and [Service Experiences]. Each firm was assigned a score based on its ranking within the seven sections of review (5 points for 1st, 4 for 2nd, 3 for 3rd, 2 for 4th and 1 for 5th), and the overall score was the sum of the awarded sections.

The MoneySense review includes hundreds of Surviscor data points, including commission and account fees, customer service results, breadth of product offerings, depth of account information and analysis, market intelligence and the digital capabilities of DIY investing at each firm. The Cost of Services Experience evaluated each firm over five trade-related investor profiles and approximately 13,000 individual trades while the Service Responsiveness Experience reviewed 161 service interactions over a 12-month period ending March 31, 2021.

Learn More about Canadian Self-Directed DIY Investing Digital Experiences

Surviscor Online Experience Ranking: The State of Self-Directed Investor Fees in Canada

Surviscor Online Experience Ranking: Canada's Best DIY Online Brokerage Experience

Surviscor Mobile Experience Rankings: Canada's Best DIY Mobile Brokerage Experience

Surviscor Service Experience Rankings: Canada's Best DIY Brokerage Service Experience